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Oil and Gas Roundup

March 08, 2013
TOPICS: In the news
Illinois deal on fracking could be national model
After years of clashing over the drilling method known as hydraulic fracturing, or “fracking,” the oil industry and environmentalists have achieved something extraordinary in Illinois: They sat down together to draft regulations both sides could live with.
If approved by lawmakers, participants say, the rules would be the nation’s strictest. The Illinois model might also offer a template to other states seeking to carve out a middle ground between energy companies that would like free rein and environmental groups that want to ban the practice entirely.
“The fact that Illinois got there,” was significant, said Brian Petty, executive vice president of governmental and regulatory affairs at the International Association of Drilling Contractors. “Anytime you can bring the lion and lamb to the table, it’s a good thing. But it’s so highly politicized in lot of places” that compromise could be difficult.

State gets first CNG truck delivery
The first of the state of Oklahoma’s 242 compressed natural gas-powered pickups arrived this week. Gov. Mary Fallin was on hand to take the keys to the first of the Chrysler Ram 2500 pickups, which will be used by the Oklahoma Department of Transportation or other state agencies.
“Converting the state’s fleet to CNG will save taxpayers millions of dollars in fuel costs,” Fallin said. The use of cleaner-burning CNG fuel is good for the environment and promotes Oklahoma-made natural gas, which in turn supports the creation of more Oklahoma jobs.”
Chrysler began producing CNG trucks in October, and the state’s order is the company’s largest to date. The bi-fuel pickups carry 18.2 gallons of CNG and 8 gallons of gas and can switch seamlessly between the two. 
The company designed the CNG trucks to be built alongside gas and diesel trucks instead of converted to CNG by a third party.
Chrysler vice president of network development and fleet Peter Grady delivered the keys to the first truck and said the company sees the future with compressed natural gas. He said Fallin’s efforts to form a coalition of states to order CNG vehicles for their fleets sped the development of Chrysler’s CNG vehicles.

Uptick on horizon for energy hiring?
A global energy industry pollster said he sees “a lot of indications” that the oil and gas job market is heating up.
Rigzone President Paul Caplan told the Tulsa World that 2012’s slight lull in industry hiring after 2011’s recent high may be over already.
“It’s not like the bottom has fallen out,” said Caplan, whose company puts out the Rigzone Global Retention Survey and reports on global industry news and job postings. 
Rigzone said almost 60 percent of U.S. energy industry professionals were contacted by recruiters in the past six months, compared to more than 75 percent a year ago.
“It’s a function of whatever the price of oil is right now,” Caplan said.
The oil and gas sector created almost 35,000 jobs last year, compared with more than 68,000 in 2011, according to the U.S. Bureau of Labor Statistics.

Tulsa company to build natural gas liquid pipeline
Tulsa-based Williams Cos. Inc. announced Wednesday that it will team with Boardwalk Pipeline Partners LP on a pipeline system to bring natural gas liquids from the Marcellus and Utica shales to the Gulf Coast. 
The planned Bluegrass Pipeline initially would offer 200,000 barrels per day of NGL take-away capacity for producers in Ohio, West Virginia and Pennsylvania, Williams said. The new line, which could be in service by 2015, would connect with Boardwalk's Texas Gas Transmission system in Hardinsburg, Ky., and from there make its way to the coasts of Louisiana and Texas for fractionation, export markets and use as feedstock at petrochemical plants. 
The Marcellus and deeper Utica are roughly in the same areas of the Northeast. Both are considered gas and liquids-rich fields. 
"We are designing Bluegrass Pipeline to provide these two world-class resource plays with access to one of the largest and most dynamic petrochemical markets in the world," Williams CEO Alan Armstrong said. "In turn, this will help producers in Ohio, Pennsylvania and West Virginia achieve an attractive value for their ethane and other liquids." 

Devon Energy says Mississippi Lime has potential, but still an exploration play
Devon Energy is encouraged by its partnership and early drilling results in the newly popular Mississippi Lime formation, but corporate leaders are not ready to call their work there a long-term success. 
The Oklahoma City-based company holds 600,000 net acres in the producing trend of northern Oklahoma and southwest Kansas, where Devon is operating 15 rigs. Thanks to horizontal drilling and hydraulic fracturing, the Mississippi Lime is attracting significant attention from big players such as Devon, SandRidge Energy, Chesapeake Energy, Marathon Oil, Midstates Petroleum and Chinese oil giant Sinopec, which has taken big stakes through joint ventures with Devon and Chesapeake. 
The jury, however, is still out on the ultimate impact of the Mississippi, which offers relatively low-cost and low-depth drilling but high water content mixed with the oil and gas.
For Devon, "It's an exploration play; it's not a development play," company spokesman Chip Minty said Wednesday. The Devon communications team is visiting area newspapers close to or within the massive limestone oil and gas play. 

Ford’s CNG vehicle sales hit record
Ford Motor Co. said Tuesday it sold a record 11,600 natural gas vehicles last year, more than four times the number it sold two years ago.
It’s the latest sign that natural gas is making inroads as a transportation fuel, particularly for truck fleets, buses and taxis. The consumer market is tougher to crack, but sales are gaining there as well.
Natural gas is cheap and plentiful in the U.S. after a spike in production that began in the middle of last decade. At the same time, the price of gasoline and diesel fuel has jumped more than 30 percent.
That makes natural gas — which also emits fewer greenhouse gases — an increasingly attractive option for truck companies and municipalities.

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